Shippers in America, slammed by record rates and delays, have been hit with another mini black swan event.
Railroad operator Union Pacific informed customers on Wednesday it will temporarily halt shipments of international containers from all west coast ports to its Global IV terminal in Chicago for up to a week, beginning on Sunday night.
The suspension includes containers from the California ports of Los Angeles, Long Beach, Oakland, and Tacoma, Washington.
“We believe this change will allow the transportation supply chain to begin working off the backlog of Global IV destined trains, while freeing up railcar assets to support import loading needs on the West Coast. We are working closely with the ocean carriers and collaborating wherever possible to improve the health of the supply chain,” a spokeswoman for Union Pacific said.
Other railway operators in the US such as BNSF Railway are also struggling with the extreme consumer demand and Covid-19 working dislocations.
“International supply chains have been straining under the weight of economic growth since the early stages of the COVID-19 recovery. Container processing at port terminals in Southern California has increased and Union Pacific’s rail shipments to and from the ports have risen and are near record highs. Union Pacific is concurrently experiencing significant congestion at our inland intermodal terminals, most notably in Chicago,” the Union Pacific spokeswoman added.
Chicago remains the biggest onward destination for cargo arriving at America’s top two ports, Los Angeles and Long Beach, ports that are having to contend with an early peak season and the impact of extra thousands of containers arriving late from key Chinese export hub, Yantian, where operations were hampered last month thanks to an outbreak of Covid-19.
Shippers looking north of the border for solutions face other problems. Wildfires in Canada have seriously impacted rail services to and from the west coast port of Vancouver this month.